September 02, 2010 | The Financial Express

Tata Motors set to produce Ace from Karnataka

Mumbai: Tata Motors on Monday said the company is expanding capacity at its Dharwad plant in Karnataka to make up for the constraints in the production of its Ace family of light commercial vehicles (LCVs) at Pantnagar in Uttarakhand, the only plant where Ace is produced now. The company, which still holds 50% of the market share in the sub-3.5 tonne segment, has been exposed to tough competition and has suffered due to capacity constraints in the last few months. In 2008-09, Ace had commanded a market share of 60%.

Talking to FE on the sidelines of the annual general meeting (AGM) of Tata Motors, PM Telang, managing director (India operations), said, “It (expansion at Dharwad) is linked to Ace production. We are looking at Dharward for setting up a facility for Ace family.” He said that it was too early to talk about how much will be the increase in production and the investment planned. However, a senior official confirmed the same and said that “it will be a full-fledged facility at the additional land which the company has at Dharwad.”

Earlier, at the AGM, Ratan N Tata, chairman of Tata Motors, had said, “We are looking at expanding capacity at the Dharwad plant for commercial vehicles.” The company ranks 15th in the world commercial vehicles market. Tata Motors holds 64% market share in the Indian commercial vehicle market, he added.

C Ramakrishnan, chief financial officer, Tata Motors, said, “It (the Dharwad expansion) is one of the options looked at and will be part of the investment planned by the company.” The company plans to invest Rs 3,000 crore (on an average) per year for the next three years in expansion and upgradation.

The Dharwad plant manufactures Marcopolo buses at present. Tata Marcopolo Motors is a 51:49 joint venture of Tata Motors and Marcopolo of Brazil. The plant has a capacity to produce 30,000 units a year, which the company plans to achieve in phases. It is manufacturing around 700-800 buses per month. “We have 15,000 Marcopolo buses on the road today,” Tata said.

The Pantnagar plant has an installed capacity of 2.5 lakh units per annum. Tata Motors had said it is producing around 15,000 Aces per month at Pantnagar. The company has plans to take it up to 20,000 units per month in a couple of months. Today, there are over 5 lakh Ace vehicles on the road.

Ace and Magic have already achieved a 1.5 lakh unit sale together in 2009-10. The company plans to sell 2.2 lakh units of light commercial vehicles this financial year. This will include 1.5 lakh Aces and around 70,000 Magics.